Saturday, July 29, 2006

Bounce

The strength in the tech sector finally came - but I missed the low by quite a bit so I am making money in most my names but getting killed in DELL even though its bounced back. Certainly after the last 2 weeks even in the face of all the middle east trouble it was quite an impressive rally. Front month vol in SPX is very cheap -13 and even septemer is only around 14. I personally think that especially with another fed rate hike coming in August its a great time to load up on downside protection. Im looking to trim my tech holdings where I can next week.

My CFC puts have worked out well - got somewhat of a dead cat bounce and I am going to buy some MFX puts (MFX index closed at 94.56 and I will buy some puts Monday.

The other thing I am looking to increase is my nat gas position for a few reasons. First I continue to think that the yield is fantastic (10% is easy to get) so that can help you through and pain. Second I think that with oil headed up - and possibly even higher people will start looking to nat gas more and more. Finally I think there is going to be a lot more consolidation in the space particularly if you can get into the small cap names (PVX I am going to start building a long term position 12.23 last)